› MARKET REVIEW APRIL 08 - 12

MARKET REVIEW APRIL 08 - 12

EUR/USD

The week begins in high spirits. The statistics on the US labor market last Friday was multidirectional. If the growth in the number of employees outside the agricultural sector, this is good news, but the slowdown of wage growth is negative news. Therefore, this week, the investor's attention will be focused on the US inflation rate, and what impact did the decline in wage growth on the indicator. After all, if consumer and core inflation continues to slow down, the chances of the decline interest rate by the US Federal Reserve will increase.

The fact that strong employment in the US did not become an argument for updating the lows in the pair, and tells us those market participants are not hurrying to buy the dollar against the euro. The good news for the euro is the perspective of the end of the trade war. Export-Oriented Germany suffered the most from tariffs in the EU, and this is the first economy of the Euroblock. Therefore, the removal of trade barriers is a bullish signal for the single European currency.

The week will begin with data on Germany's trade balance. The USA tells us about the volumes of civil supplies of the means of production and the volume of industrial orders. Tuesday will be quiet. The one volatile news will be in the US labor market from JOLTS about the number of open vacancies.

But on Wednesday is expected to increase volatility due to the strong news background. At the equator of the week will be just two powerful drivers for the market. The first will be the ECB meeting on monetary policy, where the decision on interest rates will be announced and the regulator's plans will be announced at the ECB press conference. The second driver will be basic and consumer inflation, to which due attention will be paid, against the backdrop of a slow wage from 3.4% to 3.2% year-on-year.

Germany's consumer inflation to see the world on Thursday. The States will publish data on producer price indices and the number of initial applications for unemployment benefits. The week will end with data on the volume of industrial production in the EU. Also, data on the US imports and exports will be released. The University of Michigan will publish indices of consumer expectations and sentiment. The main data come out at the equator of this week so it will be possible to fully work out the news background.

MARKET REVIEW APRIL 08 - 12


GBP/USD

Start over! Trying not to fall out of the EU without a deal, British Prime Minister Theresa May this week again will go to Brussel, that to ask for another delay, now until June 30. Any delay will require unanimous approval from all EU members, who are tired of Britain's indecision on Brexit and can put forward new conditions. EU President Donald Tusk plans to propose an extension for a year, which can be reduced if the British Parliament ratifies the agreement. However, as noted earlier, the EU will agree to an extension if Britain provides an action plan. In fact, there is no plan, as well as changes in the deal, which the British Parliament has already rejected three times. Theresa May is flouncing from her party to the leader of Labour's Jeremy Corbin, trying to find support, so far without success.

Against this background, the publication of the GDP of Albion will be held on Wednesday. Expectations are quite restrained, as expected. British business suffers from uncertainty about what Brexit will be like. Will the deal or not. Entrepreneurs can't plan expenditure, income, forcing to hold back on any investment.
Not the latest data will be the volume of retail sales with the volume of industrial production. Statistics on the trade balance will also be published. Of course, any fresh news on Brexit will have more weight, but ignore the listed news is not worth it.

MARKET REVIEW APRIL 08 - 12


OIL

The growth of commercial reserves in the US by 7.2 million barrels was forgotten by the end of the week. Aggressive reduction of production by OPEC member countries and their OPEC+allies led by Russia are providing more support to the asset than an increase in stocks in the US. The tweets of the USA President no longer work, how Trump will put pressure on the oil market now? It may be necessary to ease Iranian sanctions or Venezuelan. Pressure on Saudi Arabia through the US dollar is fraught for the States. The middle East Kingdom may refuse to sell its oil in dollars, which will shake the status of the US dollar as a reserve currency. Therefore, if Trump on the eve of elections the next year, wants to reduce oil prices, he'll have to negotiate.

An additional driver of rising oil prices is flooding in the Midwest of the United States. The March floods hit ethanol production, which was already struggling with high inventories and slow growth in domestic demand. The ethanol shortages are one of the factors pushing gasoline prices in Los Angeles and southern California to the highest in the country. For the first time since 2014, it can exceed $ 4 per gallon. Therefore, the week begins in high spirits, despite the increase in the number of drilling rigs in the US by an impressive 15 units. As reported by Baker Hughes last Friday.

MARKET REVIEW APRIL 08 - 12


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